By Susan Prince, JD
Legal Editor. Hr.BLR.com

The federal Department of Labor (DOL) will be releasing proposed changes to the overtime regulations within the next few days. These regulations will increase the number of employees nationwide who qualify for overtime. Here are 10 possible changes to the current overtime regulations:

1. Salary level. It is very likely that the DOL will increase the salary threshold required for exemption, possibly even double it. The current salary threshold for white-collar employees is $455 per week. If the threshold increases, more employees will be entitled to overtime.

2. 50 percent time requirement. The DOL may impose a hard and fast minimum 50 percent time requirement on exempt primary duties. Currently, "primary duty" means over 50 percent of the employee's time. However, time alone is not the only test.

For example, under the executive exemption, an employee who does not spend over 50 percent of his or her time in managerial duties might still have management as his or her primary duty if other pertinent factors are present. These include:

• The relative importance of the executive duties as compared with other types of duties
• The amount of time spent performing exempt work
• His or her relative freedom from supervision
• The fact that his or her salary is greater than the wages paid to other employees for the kind of nonexempt work performed by the executive

3. Duties tests. The DOL may make the duties tests for exemption stricter and more difficult to pass.

4. Discretion and independent judgment. The primary duty for the administrative exemption includes the exercise of discretion and independent judgment with respect to matters of significance. It is possible that the DOL will attempt to clarify this duty, which has caused confusion for many employers.

5. Management vs. production. The administrative exemption states that work directly related to management or general business operations of the employer or the employer's customers includes activities directly relating to assisting with the running or servicing of a business, as distinguished from production work. The DOL may address the issue of how production work affects the administrative exemption.

6. Highly compensated individuals. There is talk of raising the salary threshold for highly compensated employees to be exempt. Currently, an administrative, executive, or professional employee with total annual compensation of at least $100,000 is exempt without passing the full duties test if the employee:

• Customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative, or professional employee
• Earns at least $455 per week paid on a salary or fee basis
• Has the primary duty of performing office or nonmanual work

7. Computer professionals. It is possible that the computer professional exemption may be revamped. Currently, computer systems analysts, programmers, software engineers, and workers in similar computer-related jobs are exempt if they are paid on an hourly basis at a rate of at least $27.63 per hour or $455 per week and meet the duties requirements.

8. Advanced degrees. Most professional employees meet the primary duty requirement by working in one of the so-called “learned” professions. While the requisite knowledge is almost always acquired by a prolonged course of specialized intellectual instruction, it may, in rare instances, be gained through home study and experience. The DOL may make an advanced degree a requirement for the learned professional exemption.

9. Concurrent duties. The concurrent performance of exempt and nonexempt work does not currently disqualify an employee from the executive exemption. The regulations allow concurrent duties because, generally, exempt executives make the decision regarding when to perform nonexempt duties and remain responsible for the success or failure of business operations under their management while performing the nonexempt work.

In contrast, the nonexempt employee generally is directed by a supervisor to perform the exempt work or performs the exempt work for defined time periods. For example, an exempt store manager will sweep the floor when he or she desires or needs to do so. A nonexempt janitorial employee, on the other hand, will sweep the floor at the order of the manager. The proposed DOL regulations may revisit this rule, and potentially wipe out the concurrent duties allowance.

10. Predictable scheduling. Predictable scheduling has been a hot topic in the news as of late. This refers to limiting an employer’s flexibility when it comes to changing employees' work schedules. Predictable scheduling promotes a healthy work-life balance for employees, and provides them with a set work schedule that allows them to make concrete plans for their time when they are not working.

Once proposed rules are published in the next few days, we will have a better feel for how the changes will impact employers.

Additional resources:

• FLSA Audit Checklist: Employee Classification Checklist
• Flexible Work Hours Checklist